I have just read a great post over at Plonkee. Plonkee talks about the need to effectively put your investment strategy on “auto-pilot” – with money being dripped into stakeholder pensions and Stocks and Shares ISA’s on a regular basis.

They key with any long-term investment strategy is to start as soon as possible – tomorrow is too late!

This reminded me of an article I wrote on the Rule of 72 and the Time Value of Money. The rule of 72 simply states that whatever rate of interest your money is enjoying, divide that rate into the number 72 and that is the number of years it will take your money to double in value.

For example, at 6% per annum, your money invested today will double in value after (the maths bit! – 72/6) 12 years.

So the sooner you start investing the more of these “12 year bits” you can accumulate in your lifetime.

The other benefit of starting as soon as possible is the benefit of “compound interest” – this effectively is where “money makes money”. If I invest £100 today, at a rate of interest of 5% I will have £105 at the end of the current tax year – in year 2 my amount invested is now £105 – I will earn 5% on this total amount – so in effect my £5 interest received in year 1 is now earning interest in its own right – “money making money”.

Present day investment environment

Most of you will be aware of the recent falls in world stock markets – it would be strange if you hadn’t heard about them!

Well it’s not all bad news – the only people who lose money in a falling stockmarket are those who need or have to cash in their investments. Everyone else has simply made what is known as a “paper loss” – in reality you haven’t lost anything – it’s just on paper – the only time you have made a real loss is when you cash it in.

Why is this of interest to the shrewd investor?

The shrewd investor will be the one who has continued to invest over the last year or so – on a regular basis to benefit from “pound cost averaging” – as they have been able to buy more and more shares at a lower price.

Any investment in the stock market should be viewed as a long-term strategy and I personal am looking at a minimum 10 year timeframe for each investment I make – I only invest the money if I am willing to hold that investment for 10 years.

I have been reading many articles recently about the changes in the ISA allowance and ISA limits coming about over the next 6-7 months so I thought I would summarise them in a nutshell and answer a few of the more common questions and enquiries we are receiving about the ISA limits increase in the 2009/2010 tax year.

What are the current ISA limits / ISA allowances in the 2009/2010 tax year?

In the current tax year anyone over age 18 can invest up to £7,200 in a Stocks and Shares ISA.

Of this £7,200 ISA limit, up to £3,600 can be invested in a Cash ISA, any of the remaining £7,200 allowance which remains unused can be invested in a Stocks and Shares ISA.

What is changing on 6th October in relation to ISA allowances?

From 6th October, anyone who will be aged 50 or over, before the end of the current tax year on 5th April 2010, can invest up to £10,200 into a Stocks and Shares ISA.

Of this £10,200, up to £5,100 can be invested in a Cash ISA, with any remaining unused ISA allowance being available for investing in a Stocks and Shares ISA. For example – if you invested £2,000 in a Cash ISA you could still invest £8,200 in a Stocks and Shares ISA.

What about if you will be aged under 50 by the end of the tax year on 5th April 2010?

In these circumstances, your ISA allowance will remain at £7,200 until 5th April next year,  with you being able to invest the full £10,200 from 6th April 2010 for the 2010/2011 tax year.

I have already paid some money into my ISA (up to £7,200) – can I top it up after 6th October?

This will depend on the institution you are invested with – we suggest you ask them whether they will allow you to invest the additional amount up to £10,200 (or £5,100 in the case of Cash ISA’s) after 6th October.

Under current rules you cannot contribute to an ISA of the same type with more than one provider. Therefore, if your bank/building society etc is not willing to allow the additional investment you may have the option to transfer to another provider and make the additional investment.

You need to confirm with your current ISA provider whether they will allow the top up – if not, you need to find a provider who will accept a transfer in from the current provider as well as allowing you  to top up.


Under no circumstances should you “cash in” an ISA if your current provider won’t allow the top up, as you will not be able to reinvest this amount in the current tax year – to move money from one ISA provider to another you need to complete an “ISA Transfer form” from your new ISA provider.

And finally……

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Related Posts

Changes in ISA Allowances – Budget 2009/2010

New Tax Year – New ISA Allowance – 2009/2010

At the start of 2009 I made a pact with myself that this year I would make as much effort as possible to change my lifestyle for the benefit of the environment as well as putting more money in my pocket.

Here’s what I have managed to do so far:-

1. Walk to work instead of drive

Since relocating to Bristol about 4 years ago I had been in a position where I was commuting to work, in my car, for 2-3 hours each and every day. It wasn’t a long trip – about 8 miles each way – it was simply a case of the congestion in and around Bristol holding me up.

The benefits to me of moving away from this “daily commute” were several – saved petrol and wear and tear on my car, saving the environment and natural resources, saving me time (my favourite savings by the way!) not sitting in the car for such periods of time as well as the health benefits of moving away from the stress of the daily commute.

In order to make this change I decided to move to a new company closer to home – and am I glad I did – I know have a fantastic 10 minute walk to work through some of the most beautiful streets in Bristol. The car rarely moves off the drive in the week now and I have extra money in the bank each and every month!

2. Give up pre-packed sandwiches and bottled water

Not only are they expensive (how can bottled water, in some instances, be more expensive than petrol?!) I used to buy a sandwich on a daily basis, as well as a bottle of water for work. Not only were these expensive (when compared to the alternatives of drinking tap water and making my own lunch) but stopping buying them also did a little bit for the environment as there is no rubbish (plastic wrappers and bottles) thrown away each day.

3. Taking the Train to Visit Parents

I was surprised when I looked into it that I can get a train from Bristol to my folk’s house, and back, at the weekend for less than the cost of the petrol I would burn to drive there.

OK, it takes a little planning and I have to walk a couple of miles to the stations, but this is one less car on the road, I have three hours of my life back for doing more productive stuff – especially if I am lucky enough to get a seat with a table on the train – and the train is going there anyway so the environmental impact is considerably reduced.

The result is I arrive fresher and less stressed than I used to and I see some fantastic countryside on the way there!

4. Unplug – not standby

Like most people, my TV/DVD player, radio, microwave, etc had all been left on standby for years. I was aware that this was using electricity but not to the extent that in reality it is.

I now turn off at the wall all my electrical items when they are no longer in use.

5. Holiday in the UK this year

Having been abroad most years for the last decade I decided that this year I would not fly abroad and would holiday at home. My goal was to minimise the total cost of the holiday and to this end we went camping! This was a great adventure and bought back a lot of childhood memories.

I’ll admit it takes a bit to get used to having to get out in the middle of the night to go to the toilet in the middle of a field and waking up to a cold tent, with lots of condensation, even in the middle of summer.

But it was more than just a holiday – it was an adventure – money was saved – and a great time was had by all of us – it just proved to us that we don’t need to jet off abroad and spend lots of money in fine restaurants to have a great time. We will certainly be doing it again next year.

6. Use email instead of posting stuff

Another concern I had to address was the amount of paper being wasted in running my investments, bank accounts, pensions, bills etc and the almost daily fall of half a rain forest through my letter box.

I registered with the Mailing Preference Service – which stopped most of the junk mail coming through the letter box in a couple of weeks. I moved all bank accounts to paperless statements – I don’t need paper ones – they have historically been filed away and never looked at again until destroyed after 7 years as I am self-employed.

7. Stopped buying newspapers and magazines.

Whilst having a clear out a few months back I was shocked at the amount of newspapers and magazines I had accumulated. I noticed that these were not cheap with the average magazine costing £3 – £4. The majority of the pages are adverts which I am not interested in anyway.

So I have not bought a newspaper or magazine at all this year – a great savings – I get my news and current affairs fix from the internet and TV now.

And the next 7………….?

I am sure there are many more changes I can make to put more money in my pocket as well as doing my bit for the environment – please let me know by leaving a comment below what hints and tips you would like to share with us.

I was reading an interesting article posted by Lee over at FivePencePiece – a UK personal finance blog – earlier this afternoon and I thought I would post about it here.

Lee posted –

“It’s not widely known that if you wear a uniform at work that you have to subsequently wash at home, you can claim a reduction in tax anywhere from £20 to £140 a year. The government will give you that figure every year to cover the expense of having to wash your own clothes! This is in more official parlance, termed the Fixed Rate Expense Allowance, which changes your tax code to increase your pre-taxable earnings.”

The HMRC (Inland Revenue) has published lists of occupations here which qualify for the Fixed Rate Expense Allowance. This is basically money you won’t get unless you ask for it – you are entitled to claim it if you fall within one of the occupation classes listed and have to wash your own uniform at home.

Visits Lee’s post to find out more details about how to go about making a claim for this money, together with a handy draft letter to request this from the Inland Revenue.

It pays to plan ahead – holidays, work, kids off school, bills(!).

Click here for new 2011 Year Planner!

I have made the following year planner for 2010 – it’s saved in PDF format and will download really quickly as it is only a small file. It’s a handy A4 2010 calendar – printed landscape for optimum clarity.

Free year planner for 2010 - A4 size

Free year planner for 2010 - A4 size

It’s really simple to use – just print off as many copies as you need – it fits snuggly on an A4 sheet of paper.

Feel free to share the year planner with your friends, family and colleagues.

Download your free 2010 yearplanner now.

Download free year planner 2010

Update – A3 version released

I have now developed an A3 (double the size of A4) version which is more appropriate for displaying on a wall – don’t worry about having an A3 printer – this version prints out on 2 A4 sheets and you can simply glue or sellotape the two sheets together.

Click here to Download 2010 Year Planner – A3 version

Register for Updates

Please ensure you register for updates to this yearplanner as well as to be told when new planners and other downloads which may be of interest become available:

Related Articles:

Free Academic Yearplanner 2009/2010

Just a quick reminder that, as of 6th October 2009, the maximum which someone aged over 50 can pay into a Cash ISA in the current tax year is increasing from £3,600 to £5,100.

(The increase comes into effect for those aged under 50 from the start of the next tax year on 6th April 2010!)

In the last Budget, the Chancellor of the Exchequer increased the Stocks and Shares ISA allowance from £7,200 to £10,200 for those aged over 50 (before 5th April 2010) with the increase coming into effect on 6th October 2009.

Many will have already made their maximum contribution of £3,600 for the current tax year with the intention of topping it up to the £5,100 limit on 6th October 2009. There have been rumours that some organisations are not allowing the top-up to the new limit to be added to the existing ISA.

As you can only have one ISA with one provider in the current tax year it will be necessary to transfer the cash ISA to a new provider who will allow the top up.

Very Important – If you wish to transfer to another ISA provider then you must approach them first – they will provide you with a “transfer application” – once completed the new Cash ISA provider will approach your current provider for the transfer amount.

You CANNOT transfer to another ISA provider by “cashing in” your current ISA – if you have already invested money in an ISA, once you take it out you cannot put it back in!

And finally……

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Also – did you know you can receive our blog posts via RSS.

Related Posts

Changes in ISA Allowances – Budget 2009/2010

New Tax Year – New ISA Allowance – 2009/2010

Current Personal Pension Minimum Retirement Age is 50

Did you know that, if you’re lucky enough to be in the position, you can at present take your personal pension benefits from age 50?

Increasing to 55 from 6th April 2010

The rules are changing though – from 6th April 2010 the minimum age for taking personal pension benefits is increasing to age 55. The change in the pension rules could mean those people who are now aged 50-54 and wanting to take their pension benefits early being forced to take pension benefits from age 55 – thereby having to defer retirement for up to 5 years.

So, it pays to plan ahead!

Does this just affect people who want to take an annuity from their personal pension plan?

No – it also affects anyone who wants to move into “income drawdown” before age 55 as well as anyone receiving pension benefits in the form of “phased retirement” – this is whereby you take a percentage of your pension plan each year and is designed, through a combination of tax-free cash and annuity income, to provide you with a level of pension income which allows your remaining pension plans to remain invested and benefitting from tax-efficient growth.

Any unvested (i.e. pension funds which you have not taken pension benefits from) will have to remain so until age 55.

If you’re currently aged under 55 you seriously need to speak to your pension/financial adviser as soon as possible.


  • If you’re in “phased retirement” through your personal pension and are currently under 55 then urgently speak to your financial adviser about what actions you need to take as your income could be cut short from 6th April 2010.
  • If you’re aged 50-54 now and plan on retiring in the next few years you should consider taking benefits now to ensure you don’t fall foul of these changes in personal pension minimum retirement ages.

Naturally, before taking any actions with regard to your personal pensions or any other investments you should seek advice from a suitably qualified professional adviser.

And finally……

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Related Posts

How to Maximise Pension Income in Year One

Pension Planning for Non-Earners

Instant Returns on Pension Contributions

Personal Pension Plans – an Introduction

Thousands of students will be leaving home and heading off to places new, far afield, in search of education and trying to avoid poverty.

Here are 19 tips which helped me through Uni on a tight budget.

1. Which bank should I open a student account with?

Find out which bank has a branch close to campus – it can be useful to bank with the local branch as they will generally be more understanding of student needs – remember they are trying to capture you as a lifelong customer (it’s a dog eat dog world out there!), although in this day and age of cash machines and internet banking it might be more important to you to choose the bank which is offering the best “enticement” to bank with them.

In an article I will be writing next week I will compare and comment on the student offerings of the various banks – be sure to subscribe to ensure you receive a copy once published.

2. Make a budget and stick to it!

Ensure your money doesn’t run out before the end of term – you might like to use our income and expenditure spreadsheet to plan how your money will be coming in and going out (!).

3. Do I need a credit card?

Many institutions will be offering you a credit card which can be tempting – we’ve all been there! The thought of a £1,000 or more credit facility can be very tempting – but remember, that it’s not really a credit card – it’s a debt card and unless you pay off the balance in time, each and every month, you will start paying interest – then that great bargain you saw whilst out shopping will not be such a great bargain once the interest starts accruing.

Did you know you can get a prepaid credit card – these allow you to add money to them – either online from your bank account or through a Post Office – I have one for travelling and it is a Mastercard – ensuring it can be accepted at all places where Visa and Mastercard are accepted. There is no possibility of incurring any interest or debt with these and are a wise choice for students as parents can top them up at home for you as well with the money normally being available almost instantly if credited at certain retail outlets – ideal for those emergency situations.

4. Set aside your rent before you do anything else!

Once you have your funds in place, whether that be a student loan or money which you have saved personally, set aside your rent for the term or academic year in a savings account to ensure your don’t spend it elsewhere – many students, myself included, had to go cap in hand to their folks asking for a “loan” a couple of weeks before the end of term.

5. Fresher’s fair – beware of “joining societies” syndrome

Freshers fair is a bustling hive of activity – all the societies and clubs will be vying for your membership – we all thought it would be a good idea to join plenty of clubs and societies – “a discount if you join today!” – only to never attend a single event – beware – choose carefully!

6. Pay your Bills on Time

For many it will be the first time they have had to manage their own finances – ensure that your mobile phone, gas, water etc bills are all paid on time – you don’t want to receive red letters and be charged fines for missing payments – you probably don’t have enough money as it is!

7. Try not to use a car

Many students feel the need to use a car whilst at University – not only are they expensive to run but they also affect the environment and cause local congestion in the University city in which you live.

  • Walk if possible
  • Live on a bus route – most cities have excellent transport facilities to and from University campuses
  • If you must use a car try car sharing – sharing the petrol and cutting down on the congestion

8. Earn some money

Most students I knew had to supplement their income by working, either during term time or after the end of term in the holidays. Make sure that any work you do does not interfere with your studying – that’s what you’re at University for! You can earn £6,475 in the current tax year (up to 6th April 2010) without having to pay any income tax – ensure your employer gives you the correct tax code.

9. Start your Own Business

Today there are more opportunities for students to earn a living on the side – selling stuff on Ebay, car boot sales, writing a blog and earning an income from advertising (not easy) – be creative – you don’t need to stack shelves in a supermarket!

10. If in trouble ask for help

If you have money problems speak to someone about it – parents, friends, Student Union (they will have excellent staff who can really help you sort things out) – the worst possible thing you can do is stick your head in the sand and ignore an issue – it won’t go away and will most likely get even worse.

11. Avoid fraud

Be wary of any offer which looks too good to be true – it often will be! There are a lot of scumbags out there trying to take your money off you – just be careful.

12. Don’t carry lots of cash

There is no need to carry lots of cash with you – you might drop or lose your wallet or purse, or even worse. Get a pre-paid credit card – it can be cancelled and be replaced – cash can’t

13. Get contents insurance

Many specialist insurance companies offer policies ideally suited for students. You may not think you need insurance but consider how much it would cost for your replace that laptop or that hifi, that nice new LCD flatscreen. Policies are not expensive and are strongly recommended – it’s a sad fact that student accommodation can get burgled – we were but thankfully we were insured.

14. Shopping around can save you money!

You don’t need me to tell you that buying the latest DVD etc in the shops cannot be improved on by shopping online – make sure you shop around to get the best deal going – there is no need to pay top dollar for any purchase – and as a student you will have plenty of free time to shop around and plan ahead for birthday and christmas presents.

15. Student Card – Use It!

Many retailers in University towns will offer discounts to students – your Student Union will probably issue you with a list of local traders – use them – save money.

16. Student Nights

Many clubs will offer student nights – usually in the week – when I went to Uni back in the early 90’s it was free entry and £1 a pint! Cheaper than drinking in the local pubs and clubs.

17. Don’t hang out with frivolous people!

“Keeping up with the Jones’s” when you are at University and it is fair to say that some students will have considerably more money than you – it’s difficult to keep up a champagne lifestyle on a tap-water income! Choose your friends wisely – you will probably spend the next 3 years trying to shake off the friends you make in the first 3 weeks anyway!

18. Buy One Get One Free!

Take your time in the supermarket – there are some great offers if you look. Learn to cook – there are loads of simple recipes online for students – here’s a site I just found – it can be fun to cook your own food – pre-packed meals are boring and if you cook too much save some for later or invite some friends over.

19. Avoid getting into trouble – get a TV License

If you live away from home you may need to ensure there is a TV licence in place. Visit the TV Licensing website to find out about your own particular circumstances.

Please share your own hints and tips by adding a comment below.

And finally……..

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Interesting article –

Check out this article over at moneywatch.co.uk – the most expensive and cheapest University towns

The following is a list of the top 10 read articles in August.

1. Pay Yourself First – the first step in wealth creation

This article discusses the need to save from income before spending it! This is a form of deferred consumption and by saving first and then spending what is left you can build a solid foundation to your financial future.

Tip – aim to start saving 10% of net income each and every month – it won’t be easy at first but your budget and lifestyle will adapt over time.

2. Get Money for your Old Mobile Phone

Many of us have old mobile handsets lying around – did you know you can sell yours online – here is an article discussing this – I recently sold my old Sony Ericsson K800i and received £28.00.

3. New Tax New ISA Allowance – ISA 2009/2010

In just over a months time the ISA allowance for over 50’s increases to £10,200, with the allowance increasing for the remainder of the population on 6th April 2010.

4. Cashflow forecasting – income and expenditure spreadsheet

Our free income and expenditure spreadsheet remains as popular as ever and we are receiving some great feedback from people who are using it – thanks!

5. Investment Bonds – an introduction

An investment bond can be a shrewd financial planning tool as well as an investment vehicle.

6. It’s not how much you save but how long

This article discusses how, over time, money make money – with interest earned on a savings account itself earning interest. The longer you can save for the more money you will build up – start saving as young as possible.

7. Non-taxpayers – ensure you receive your bank and building society interest without tax deducted

Completing a simple form can ensure that non-taxpayers, both young and old don’t pay unnecessary income tax on the interest they receive on their savings accounts. With interest rates as low as they are at present every penny counts so ensure you’re registered to receive your interest gross if applicable.

8. Personal Finance Blogroll

A list of the other personal finance blogs I visit on a regular basis – makes for some interesting reading!

9. Retirement is an Income not an Age

Many have fallen into the trap that retirement occurs at a particular age. Unfortunately for most of the population this occurs simply because they haven’t secured sufficient income to retire earlier. By targeting a specific income and going for that it is possible to retire early. In a forthcoming article on “goal setting” we will discuss how this can be achieved.

10. Buy a Financial Calculator

If you’re serious about planning your own finances I strongly recommend buying a good financial calculator – ideal for calculating rates of return, how much to save on a regular basis to build a certain sized fund etc.

And finally……

Be sure to subscribe to our newsletter – it’s free and you can cancel it at any time.

Also – did you know you can receive our blog posts via RSS.